A federal judge has blocked an Obama administration rule to extend mandatory overtime pay to more than 4 million salaried workers from taking effect, which was supposed to go into effect tomorrow, December 1, 2016.
U.S. District Judge Amos Mazzant, in Sherman, Texas, agreed with 21 states and a coalition of business groups, including the U.S. Chamber of Commerce, that the rule is unlawful and granted their motion for a nationwide injunction. The case is Nevada v. U.S. Department of Labor, U.S. District Court for the Eastern District of Texas, No. 16-cv-731.
The rule, issued by the Labor Department, was to take effect Dec. 1 and would have doubled to $47,500 the maximum salary a worker can earn and still be eligible for mandatory overtime pay.
The decision, while welcomed by many business groups, throws the issue into a state of confusion.
The answer for many businesses is more complicated than simply not implementing the provisions of the federal regulation, particularly for California employers who have to contend with state law on the issue.
Employers considering changing their plans to adapt to the new rules should consult with experienced management labor relations counsel before doing so, especially if classification changes were contemplated.